Fitch Expects to Rate Apollo Management Holdings' Unsecured Debt 'A-'

  Fitch Expects to Rate Apollo Management Holdings' Unsecured Debt 'A-'

Business Wire

NEW YORK -- May 27, 2014

Fitch Ratings expects to assign an unsecured debt rating of 'A-' to the 10-
year senior unsecured notes issued by Apollo Management Holdings, L.P., a
subsidiary of Apollo Global Management, LLC (Apollo, rated 'A-', Stable). A
portion of the net proceeds are expected to be used to repay a portion of
outstanding term loans under the existing bank credit facilities, while
remaining proceeds are expected to be used for general corporate purposes.

Concurrently, Fitch has assigned a long-term Issuer Default Rating (IDR) of
'A-' to AMH Holdings (Cayman), L.P. This entity is the parent of Apollo
Management Holdings, L.P, and will provide a joint and several guarantee on
the public notes along with Apollo Principal Holdings I-IX, L.P. The Rating
Outlook is Stable.

KEY RATING DRIVERS

The expected rating on the new unsecured notes reflects joint and several
guarantees on indebtedness by the various subsidiaries which collect all of
the fee, carry, and investment income earned by Apollo. Therefore the rating
of the unsecured notes is expected to be equalized with the Issuer Default
Rating of Apollo.

At March 31, 2014, Apollo's leverage (debt/FEBITDA) was 2.16 times (x), on a
trailing 12 month (TTM) basis, which was below the peer average of
approximately 3.0x. Leverage will increase with this issuance; however, Fitch
expects the firm's leverage to decline over the balance of 2014 as incremental
fees are earned from Apollo Investment Fund VIII, L.P., which began its
investment period in August 2013, and Athene Holding Ltd.'s October 2013
acquisition of the U.S. annuity operations of Aviva plc. Longer-term, Fitch
believes Apollo's leverage will be at-or-below the agency's general 'A'
category tolerance of 2.5x.

RATING SENSITIVITIES

The rating of the unsecured notes is expected to be equalized with the Issuer
Default Rating of Apollo. Therefore, any change in Apollo's rating would have
a commensurate impact on the rating of the unsecured notes.

The Stable Outlook on the various operating subsidiaries of Apollo reflects
Fitch's expectations that management will continue to generate stable
management and advisory fees, grow/retain FAUM through the raising of new and
expansion of existing funds, albeit at a much more moderate pace near-term,
sustain recent operating margins, operate with relatively low leverage, and
retain a solid liquidity profile in order to meet co-investment commitments to
funds.

Declines in investment performance, a key man event, and/or legislative risk
which negatively impact the company's ability to raise FAUM and generate fees,
meaningful increases in leverage, and/or impairment of the liquidity profile
could result in negative rating action. Furthermore, ratings could be
adversely affected if the relationship between Apollo and Athene were to
materially change as a result of regulatory scrutiny, outsized fines/penalties
or loss of management or sub-advisory fees.

Conversely, positive rating momentum could develop from a demonstrated ability
to operate at the current size, scale and margin level over an extended period
of time. An increase in fee diversity, lower leverage, and/or stronger
liquidity would also be viewed favorably.

Apollo is a global alternative investment manager specializing in private
equity, credit and real estate. FAUM amounted to $128.5 billion at March 31,
2014 and total assets under management (AUM) were $159.3 billion. The
company's Class A shares are listed on the NYSE under the ticker 'APO'.

Fitch has assigned the following expected rating:

Apollo Management Holdings, L.P.

--Unsecured debt 'A-(EXP)'.

Fitch has also assigned the following rating with a Stable Outlook:

AMH Holdings (Cayman), L.P.

--Long-term IDR 'A-'.

Existing ratings for Apollo are as follows:

Apollo Management Holdings, L.P.

Apollo Management, L.P.

Apollo Capital Management, L.P.

Apollo International Management, L.P.

AAA Holdings L.P.

Apollo Principal Holdings I-IX, L.P.

ST Holdings GP, LLC

ST Management Holdings, LLC

--Long-term IDR 'A-';

--Unsecured debt rating 'A-'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'

Applicable Criteria and Related Research:

--'Global Financial Institutions Criteria' (January 2014);

--'Investment Manager and Alternative Funds Criteria' (December 2013).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Investment Manager and Alternative Funds Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725057

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831819

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Contact:

Fitch Ratings
Primary Analyst
Meghan Neenan, CFA
Senior Director
+1-212-908-9121
Fitch Ratings, Inc.
33 White Hall St.
New York, NY 10004
or
Secondary Analyst
Mohak Rao, CFA
Director
+1-212-908-0559
or
Committee Chairperson
Joo-Yung Lee
Managing Director
+1-212-908-0560
or
Media Relations
Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com
 
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